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May 3, 2013

Banks Must Step Up Digital Game to Woo the Wealthy

The more opportunities banks create to connect digitally with their clients, the greater the chance they have to inspire their brand loyalty, according to the final report in the 2012–2013 Futurewealth series.

The reports, sponsored by SEI, Standard Chartered Private Bank and Scorpio Partnership, are based on the views of 3,477 of the world’s up-and-coming wealthy, who have an average net worth of $1.9 million.

The final report, “The Digital Future of Client Relationships,” focuses on leading global brands that have been recognized for having successful digital marketing strategies and a strong following among Futurewealth customers.

It found that the brands that had embraced the multifaceted nature of digital relationships also had a greater influence on their customers' purchasing decisions.

Wealthier customers were more influenced by multichannel marketing than less affluent ones. For example, respondents with personal wealth of more than $4 million were 40% more likely to be influenced by a multichannel strategy from a bank than clients with wealth less than $500,000.

Yet, banks lagged other luxury providers in fostering digital connections with clients. Affluent owners of luxury cars, for example, found the digital marketing from those companies to have an importance of 6.6 out of 10 in their purchasing decision, compared with 5 out of 10 for banks.

Luxury car owners also graded the quality of ongoing digital contact with car companies at 7.1 out of 10 versus 5.9 among the wealthy clients of banks.

“Based on the collective findings of all four of the Futurewealth reports, it’s obvious the banking and wealth management industry is making strides in using technology and digital communications, but not yet meeting the demands and interests of its clients,” Joseph Ujobai, an SEI executive vice president, said in a statement.

“Technology integration and workflow management features available through today’s wealth management platforms are certainly helping, but it’s personal and online relationships that will close the gap between financial services and other industries. Wealth management providers need to recognize and concentrate on what drives the up-and-coming wealthy to select and commit to certain brands.”

Wealthy clients from the Asia/Pacific region rated the ongoing digital contact from their banks slightly higher, with a grade of 6.6 out of 10. However, an evident need for improvement exists in Europe, where the ongoing digital performance rating was just 5.5 out of 10.

The paper also looks at the relationship between digital marketing strategies and brand loyalty.

This year’s brand love index, measuring three dimensions of a customer’s long-term relationship with a company (warmth, commitment and excitement), included only those firms that have been recognized for their digital marketing approach. It found that nearly all of them had increased their standing with customers and clients.

Banks increased their brand love most, with a 7.2% improvement since 2011.

However, luxury car companies once again stood out for inspiring the most brand love among their clients, with an average Brand Love score of 86 points, compared with 71 points among leading international banking brands.